Pratte
J.A.:—This
appeal
raises
the
question
of
whether
an
agreement
concluded
between
the
partners
of
the
partnership
Desjardins
et
Sauriol
met
the
requirements
of
subsection
96(1.1)
of
the
Income
Tax
Act,
R.S.C.
1952,
c.
148
(am.
S.C.
1970-71-72,
c.
63)
(the
"Act"),
according
to
which
a
share
of
the
income
from
the
partnership
was
assigned
to
the
respondent
Laferriére.
|
The
trial
judge
answered
this
|
uestion
in
the
negative.
In
his
view
there
was
|
|
nothing
in
the
evidence
to
show
the
|
existence
of
such
an
agreement.
The
appel
|
lants
made
one
argument
against
this
decision,
namely
that
the
judge
based
his
ruling
on
a
misinterpretation
of
subsection
96(1.1).
That
subsection
speaks
of
an
agreement
between
partners
"to
allocate
a
share
of
the
income
or
loss
of
the
partnership".
In
the
appellant's
submission
the
allocation
mentioned
in
this
section
is
not
merely,
as
the
trial
judge
assumed,
actual
allocation
to
a
former
partner
of
a
share
of
the
income
or
loss
of
the
partnership:
it
could
also
be
a
purely
fictitious
allocation
of
the
income
made
for
tax
purposes
only;
and
the
appellants
further
submitted
that
the
record
indicated
the
existence
of
such
an
allocation.
It
seems
to
the
Court
that
this
argument
should
be
dismissed.
Subsection
96(1.1)
uses
the
word
“allocate”
in
its
ordinary
meaning,
namely
assigning
or
setting
aside,
and
it
refers
to
a
real
allocation
or
assignment
which
is
the
source
of
a
right
for
its
recipient.
That
being
the
case,
the
appeal
will
be
dismissed.
The
respondent
Laferrière
will
be
entitled
to
recover
one-quarter
of
his
costs
from
each
of
the
appellants
and
half
from
Her
Majesty.
Appeal
dismissed.
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